Swedish appliance manufacturer Electrolux has announced that it will acquire South African water heater producer Kwikot from RMB Corvest and other parties.
The price tag for the deal is not known.
Electrolux says the acquisition broadens its home comfort product range, while also offering further growth opportunities in Africa.
The privately owned Kwikot Group, with its 800 employees, is based in Johannesburg, which is also the location for its production facilities and main warehouse.
Kwikot products, which include large-capacity electric and solar water heaters, heat pumps, kitchen sinks, consumables and accessories, are sold primarily in South Africa and neighbouring countries.
Electrolux currently supplies small and medium- capacity water heaters in Northern Africa.
“Acquiring Kwikot Group will provide a step change for Electrolux in Southern Africa through the complementary product offering and access to important customer segments, and by adding a strong distribution and service network in the region relevant for our other product categories,” says head of Electrolux Major Appliances Europe, Middle East and Africa Dan Arler.
“The acquisition fits perfectly with our strategy to drive profitable growth. It broadens the Electrolux offering and expertise for home comfort in areas such as indoor air quality and water treatment. We will now have a full range of water heating products supporting our continued growth and profitability.”
Electrolux currently operates in South Africa mainly by selling small and major appliances under brands such as Kelvinator, AEG and Electrolux.
Beyond supporting Electrolux’s strategy for growth in Africa, the acquisition of Kwikot also enables the company to develop South Africa as a regional manufacturing hub, notes the company.
Electrolux says: “[We are] planning to build on Kwikot’s already excellent existing manufacturing facilities. “This will directly contribute to enhancing South Africa’s industrial competitiveness and export potential.
”It also notes that Kwikot’s current management will remain with the business, adding that the proposed merger is expected to result in zero net job losses.
“We look forward to investing in Kwikot’s existing operations and introducing our world-class Electrolux manufacturing system here,” said Electrolux Major Appliances Europe, Middle East and Africa senior VP Ian Banes.
“We are excited about a next chapter in Kwikot’s growth story,” adds Kwikot CEO Pieter Malan.
“We have had an excellent, supportive relationship with current shareholders and we relish the opportunity to cooperate with Electrolux, given their excellent track record of investing for growth. Together, I am convinced we will make good on the opportunities ahead of us to the benefit of our customers, employees and suppliers.”
The acquisition is subject to regulatory approvals being obtained before June 30, 2017.